State of California registered warrants are printed at the State Controller's office in Sacramento, Calif., on Thursday, July 2, 2009. The first batches of IOUs went out today and we have a chance to photograph the printing of the checks. Aside from the daily, this would be a good opportunity to shoot the checks for files.

State Controller John Chiang warned Wednesday that California may begin issuing IOUs in as little as two weeks because the state budget is now 50 days late, with no resolution in sight.

In a speech to the Sacramento Press Club, Chiang, a Democrat, criticized the governor and lawmakers for not yet agreeing on a spending plan for the state that solves a $19 billion deficit. California has issued IOUs only twice since the Great Depression: last year and in 1992.

"I must be clear that this year's looming cash crisis is fundamentally different than last year's," Chiang said, adding that in 2009, IOUs resulted from a steep drop in revenue due to the recession. "Importantly, the fiscal crisis we face this year is 100 percent political and the only thing standing in our way is the absence of leadership."

He said the IOUs, officially called registered warrants, would be issued in two to four weeks. Without a budget, the state will run out of cash in October if it does not issue IOUs.

IOUs could be sent to:

-- Vendors who provide goods and services to the state.

-- People and businesses receiving tax refunds.

-- The commission that issues Cal Grants to college students.

-- Counties, for the state's portion of the CalWORKS welfare-to-work program and social service programs for mental health and drug and alcohol abuse.

-- The federal government for the state's portion of Supplemental Security Income and State Supplementary Payment programs for low-income seniors, the blind and the disabled. Last year, the federal government made the full payments but charged the state interest when California repaid that money.

The state issued nearly 450,000 IOUs worth $2.6 billion last year. As of May, $16.6 million in IOUs had yet to be cashed.State Sen. President Darrell Steinberg, D-Sacramento, said he would welcome the controller's support for the Democrats' budget plan, which includes an increase in personal income taxes and a reduction of the sales tax and would avoid the major cuts called for in Gov. Arnold Schwarzenegger's budget, such as the elimination of CalWORKS.

"I'm sure the controller does not endorse the draconian cuts pushed by the governor," Steinberg said. "We're ready to close on a budget that ensures our kids can still receive a quality education and protects our state and our people from economic collapse."

Schwarzenegger's spokesman Aaron McLear said the governor did his job on time by proposing budget solutions and that what Democrats want is "billions of tax increases on the middle class," which is not acceptable.

Republican Assembly Leader Martin Garrick of Carlsbad (San Diego County) said that if IOUs are issued, the blame lies solely at the feet of Democrats, as Republicans have rallied around the governor's May budget plan.

"The fact that (Chiang's) party is the one that has delayed it ... is what he should be speaking to, not everyone sitting here in the Legislature when Republicans have been here ready to work," said Garrick, who noted that Democrats did not present a unified budget plan until Aug. 3. The fiscal year began July 1. He said Democrats have not asked for a meeting for more than two weeks.

Still, Chiang said he hoped such a drastic measure could be avoided. "None of this needs to take place if the governor and the Legislature" pass a budget, he said, adding later that, "I don't envy their position."

Public anger with the impasse appears to be growing, as a few hours after Chiang's speech police arrested 22 demonstrators - many in wheelchairs - who blocked an intersection near the Capitol after a march to protest potential budget cuts.

The demonstrators filled the intersection while holding signs and chanting in support of raising taxes to stave off budget cuts.

"We want more revenues in the state budget, and the way to get that is through taxing," said Kitty Cone, who participated in the march in her wheelchair. "People don't like to say that, but taxes are what keeps our country going."

Onlookers cheered as demonstrators were arrested, each led by two or three Sacramento police officers. Several demonstrators resumed chanting after the intersection was cleared.